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100 CHAPTER 4 The Procurement Process

In contrast to a goods receipt, a company uses a goods issue when
materials are removed from storage, in which case inventory is reduced.
A company typically generates a goods issue when it (a) ships materials
to a customer, (b) uses them for internal consumption (e.g., to produce
another material), or (c) designates them for sampling or to scrap. The
material document created by the goods issue will record the location
from which the materials were issued as well as the quantity involved. The
accounting document will indicate the relevant general ledger accounts
and amounts. For example, when GBI ships materials to a customer, it
removes the materials from inventory and records a goods issue in its SAP
ERP system.
A stock transfer is used to move goods from one location to another
within the organization. Materials can be transferred between storage loca-
tions, between plants within the same company codes, and between plants
across company codes. In all cases, one or more material documents are cre-
ated to record the transfer. In addition, for transfers between plants or com-
pany codes, accounting documents are also created. Recall that earlier in the
chapter we defi ned stock transfer as an item category. So, why is it also a goods
movement? The reason is that the procurement process can be used to transfer
materials from one location to another. However, materials can be transferred
outside the procurement process as well. In these cases the transfer can sim-
ply be recorded via a goods movement. This approach is quicker and more
direct than using the procurement process, but it has limitations. We discuss
stock transfers in greater detail in the chapter on inventory and warehouse
management.
Finally, an enterprise uses a transfer posting to change a material’s
status or type. For example, it would use a transfer posting to redefine a
material from in quality inspection status to unrestricted use or to change
a material type from raw materials to fi nished goods. A transfer posting
may or may not involve the physical movement of materials from one
location to another. In either case, a material document is created to record
the status change. For example, when the company receives materials from
a vendor, it stores them and designates them as in quality inspection. After
they pass inspection, it issues a transfer posting to “move” them to unre-
stricted use status. In this situation a material document is created, but
an accounting document is not. As with stock transfers, we will examine
transfer postings in greater detail in the chapter on inventory and ware-
house management.
A goods movement will always result in the creation of a material doc-
ument. In addition, a fi nancial accounting document is created if the move-
ment results in a change in valuation. As we discussed in Chapter 2, fi nancial
accounting documents record the impact of a process or process step on rel-
evant general ledger accounts.
A material document records data related to a goods movement,
such as the receipt of goods from a vendor. As illustrated in Figure 4-11,
the material document consists of a header and one or more items or
details. The header includes data such as the date, the name of the person
who created the document, and the source of the document, that is, what
process step or transaction was used to create it. The items identify the
materials involved, quantities, location, the movement type used, and other
relevant data.

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